| The biggest mistake that most beginning forex | | | | The day-trader goes for the quick gain. Successful |
| traders make is made before they even place their | | | | day-traders have nerves of steel and don't mind |
| first trade. In fact, they usually make this mistake | | | | sitting in front of their computers watching the |
| before they even open their trading account! | | | | up-ticks and down-ticks of their favorite pair(s). They |
| Most traders begin by learning the mechanics and | | | | can easily stomach many small losses knowing that |
| terminology of trading. | | | | they only need a successful trade or two to put |
| They study charts and look for trends. They try to | | | | them ahead. The day-trader depends heavily on the |
| find predictable patterns and how to profit from | | | | charts and technical analysis. But they really only care |
| them. | | | | about what's going on with the 5-minute, 10-minute, |
| They learn the meanings of the words "pip", "cable", | | | | or 15 minute charts. A daily chart represents an |
| "swissie", "shoulder", "flag", etc. | | | | eternity for a day-trader. |
| They study how the "Aussie" behaves when the | | | | The next type of trader is the swing-trader. This |
| Royal Bank of Australia lowers rates or what the | | | | type of trader is a bit more patient then the day |
| impact on the EUR/USD will be after Jean Claude | | | | trader. The swing-trader will read the weekend |
| Trechet says the word "vigilant" three times during | | | | papers and websites and study the fundamentals of |
| the ECB rate announcement or what the rising price | | | | their favorite pair. They'll then take a look at the |
| of oil will do for the Canadian dollar. | | | | yearly and daily charts, looking for good entries and |
| But the one thing most traders don't do before they | | | | then decide on their target. Then they'll set up their |
| begin their careers in this "sport" is to properly assess | | | | trade on Monday morning, which may or may not be |
| their own temperament and how that will effect their | | | | triggered. When the entry for the trade is triggered, |
| trading. | | | | the swing-trader is patient to then wait until either |
| The cute E*Trade commercial which shows a talking | | | | their stop or target takes them out. The |
| baby placing a trade is accurate. It's easy to place a | | | | swing-trader's trades will run for days, weeks, or |
| trade. The mechanics are easy enough to learn. And | | | | months, typically - and that's plenty fast for them. |
| many traders, even adults, feel like barfing right after | | | | The third type of trader is the investor. And the |
| they pull the trigger! | | | | investor is the most patient of them all. The investor |
| Are you going to barf every time you place a trade? | | | | trades off of very long term trends. He places his |
| Will you be afraid of losing? Will you become angry | | | | trade and forgets about it. It may be months or |
| when you do lose on a trade - even if it's a small | | | | years before he exits his trade. The investor relies |
| amount? When you close out a trade, will you feel | | | | mostly on fundamentals and long-term economic |
| elated (on a win) or humiliated (with a loss)? | | | | trends. |
| These are all questions that you need answered | | | | The last type of trader is the non-trader. Although, |
| before you place that first trade. | | | | the dealers wouldn't agree, it's actually ok to not |
| When you have answered the tough questions about | | | | trade. For some people, trading is just going to be |
| yourself, you will be well on your way to determining | | | | too stressful for them. Even though education can |
| what kind of trader you will be. | | | | relieve a lot of this stress it won't eliminate for |
| Many of those who hold educational seminars and | | | | everyone. |
| write books on forex traders talk about 3 types of | | | | What category am I in? Right now, I'm in category |
| traders: the day-trader, the swing-trader, and the | | | | four. But, soon, look for me in category 3. |
| investor. However, I believe there is a viable fourth | | | | What is the best category to be in? Again, it all |
| category: the non-trader. | | | | depends on who you are. |